Recently, the "2024 First Half China Agricultural Product E-commerce Senior Seminar" released the "2024 First Half China Agricultural Product E-commerce Development Report" (hereinafter referred to as the "Report"). The report shows that in 2023, the online retail sales of agricultural products in China will reach 587.03 billion yuan, which is about five times that of 2014; In the first half of 2024, this data increased by 21.7% year-on-year. The scale of agricultural products leaving villages and entering cities continues to expand, while logistics costs continue to decline. Data shows that the logistics fee rate for agricultural products in China has dropped from 18% in 2012 to 14.4% last year, and reached a new low of 14.2% in the first half of this year.
Hong Tao, the publisher of the report and director of the Institute of Business Economics at Beijing Technology and Business University, pointed out that the record low logistics rates for agricultural products are closely related to the recent increase in logistics subsidies for high-quality agricultural products penetrating westward by e-commerce platforms, as well as the continuous investment in infrastructure construction such as fresh cold chain logistics for many years.
At present, logistics services are one of the main costs for agricultural products to leave villages and enter cities. In the past, the southeastern region with better economic conditions and denser logistics outlets provided "free shipping" services, while the northwestern region with relatively poorer economic conditions and sparse logistics outlets did not offer "free shipping". This "logistics" model to a considerable extent limited the "commercial flow" of fresh agricultural goods flowing westward.
In 2022, Pinduoduo, the largest agricultural product uplink platform in China, pioneered the transit and collection mode in remote areas such as Xinjiang, Xizang and Inner Mongolia. Last year, it took the lead in introducing free package mail service to villages in the western region. In September this year, Pinduoduo announced the second stage transfer fees for remote area express delivery. This series of "logistics" measures quickly attracted more platforms to follow suit, leading to an overall decrease in the cost of agricultural products traveling westward and a subtle change in the "commercial flow" of goods.
"The support of the Internet platform represented by Pinduoduo to the e-commerce ecology in western China is of great strategic significance for promoting the coordinated development of e-commerce in eastern, central and western China, accelerating the circulation of modern agricultural products, and promoting the high-quality development of agricultural products e-commerce." Hong Tao believes that the platform eliminates the logistics transfer fees of agricultural goods merchants, on the one hand, it reduces the logistics costs of agricultural products going to the countryside and villages, and promotes more high-quality goods to connect to remote areas directly, so as to truly achieve a smooth flow of goods; On the other hand, leveraging more businesses in the ecosystem to join the market and consumer revitalization in remote areas, stimulating market vitality, and helping to unleash consumer potential.
Hong Tao stated that the business model innovation explored by Pinduoduo is leading the modernization process of China's agricultural product e-commerce. By reducing transit fees, promoting free shipping to villages, and increasing subsidies for westbound merchants through the 'billion yuan reduction' policy, the e-commerce ecosystem in the western region will be reshaped and optimized. The economy in the northwest will flow rapidly like that in the southeast, and the 'economic gap' between the two regions is expected to gradually narrow and bridge